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Duty-free shops, hotels suffer dip in Chinese sales amid THAAD row

All Headlines 10:05 March 28, 2017

SEOUL, March 28 (Yonhap) -- Duty-free stores and hotels in South Korea are suffering a dip in sales after China's travel agencies stopped selling trips to Korea early this month, industry sources said Tuesday, stemming from a diplomatic row over Seoul's deployment of a U.S. anti-missile system.

Lotte Duty Free, the No. 1 duty-free shop in the country, saw its sales from Chinese customers at key branches in Seoul and Jeju island tumble 40 percent between March 20-26, compared with a year earlier, heading for a cumulative 30 percent on-year drop for March revenue, the company said.

The Chinese sales of Shilla Duty Free shrank 30 percent between March 25-26 from a year ago, according to Hotel Shilla, which runs the duty-free operation.

The local tourism industry has been hit the hardest from what appears to be retaliation by Korea's biggest trading partner for the planned stationing of the Terminal High Altitude Area Defense (THAAD) on its soil.

Beijing sees it as a threat that can be used to spy on its own military, despite the repeated assurance from Seoul and Washington that it is for defensive purposes against North Korea's growing nuclear and missile threats.

Industry watchers forecast that their losses will likely widen going forward, given that Beijing hasn't offered any signs when the restriction will end. As of last year, Chinese tourists took up half of the foreigners who visited Korea.

Between March 1-19, local duty-free stores lost a combined 12 percent of sales vis-a-vis the previous year, with the number of their Chinese customers sliding 29 percent, the culture ministry said earlier. China's travel ban took effect March 15.

Hotels in key tourist districts are also taking the brunt of China's hostile policy, reporting a rapid on-year decline in Chinese guests by some 25 percent to as high as 75 percent since the trip ban, according to businesses sources.

Duty-free shops, hotels suffer dip in Chinese sales amid THAAD row - 1


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